“VAT Is Not Under Consideration”

That’s the message put out Monday by White House Press Secretary Robert Gibbs and by House Ways and Means Chair Sander Levin.

Here’s what Gibbs told reporters:

Q All right, let me ask you about the value-added tax. Is there anything that this administration is doing to consider, calculate, pose in any way, shape or form, weigh or measure potential deficit implications or economic implications of a value-added tax?

MR. GIBBS: No, this is not something the President has proposed nor is it under consideration.

Q At any level of this White House at all?

MR. GIBBS: I’d point you to —

Q You said there were hundreds of memos being written all throughout the government at any given time. Couldn’t one of them be written — get written —

MR. GIBBS: As I said, the President has not proposed this idea nor is it under consideration.

Here’s what Levin told the National Press Club:

MODERATOR: We’ve had several questions relating to the value added tax, which is a proposal that’s been discussed on Capitol Hill. Could you please discuss the pros and cons of a value added tax? And would such a tax violate President Obama’s promise not to impose taxes on people making less than $250,000?

LEVIN: You know, I’ve been listening to this debate. I saw, waiting for the Red Wings hockey game yesterday — I shouldn’t have waited — but I listened to the talk shows, and it was interesting how the value added tax had gained such prominence. I was somewhat surprised.

I’ve heard almost nobody within our ranks discuss it. I — I know that one distinguished economist in this town did talk about it, but the administration hasn’t. So I was somewhat surprised. My guess is that by next week it will be a goner, and that’s for good reason.

I think it’s being raised mostly by the Republicans for political gain. They are trying to label us as a taxer. I suggest not only are they wrong, but they should read Paul Ryan’s proposal. He’s a Republican — my pal Paul — and he has a value added tax provision in it. So I don’t think it’s on the agenda. And so let me suggest that we argue the pros and cons the next time I can come to the Press Club. Thank you.

About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

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